Suffice it to say, FedEx Ground struggled with the decision. No doubt great debate occurred before marching orders were given. But, alas, service (a.k.a. the customer) came second. A very close second, Im sure, but second nonetheless. Profits always had priority, but now its customers are watching service take center stage. I have spoken to many shippers recently, and a topic that strikes a nerve is FedEx Grounds service guarantee refund.
Last year, FedEx Grounds delivery standards were padded with an extra day so as many as 30% of deliveries arrived early. Its strategy was fewer late packages, fewer refunds paid. But the shipping community was too smart to fall for that trick. So, standards were changed in January 2001 to better reflect actual transit times. Then, in March, in the still of the night, FedEx Ground decided to reduce its commitment to the highly advertised guaranteed service by removing clusters of ZIP Codes from the program. The ZIP Codes excluded change depending on origin ZIP Code. Dont bother looking for a press release announcing the change. You wont find one. Thats not the kind of news you want to share with your customers. FedEx Ground would rather renege on its commitment to service than continue to open its wallet because of ongoing poor service. You see, it isnt all that easy to correct service deficiencies. It requires experienced frontline management, minimum package handler turnover, a commitment to training and, most importantly, time. Therein lies the rub! Time equates to more refunds and lower profits.
The shipping community is naturally confused and upset. It seems FedEx Ground has never really bought into the guarantee service concept. As youll recall, FedEx Ground followed UPS into the world of guaranteed service. They had no choice. UPS upped the ante. Now, FedEx Ground wants some of its chips back. It appears the stakes are too high when it doesnt perform.
FedEx Ground requires its customers to use its TRACPAK phone system to file guarantee claims. Earlier this year, the entry process was changed. Previously, customers entered their seven-digit customer numbers once at the outset of the call, then entered the eight-digit number for each late package. But that was changed. Now, customers are forced to enter the shipper and package number for each package. So, if there are 100 late packages, the required number of keystrokes went from 807 to 1500. Thats nearly double. Hows that for user-friendly customer service?
Clearly, Delivery Exception descriptions on UPS Web site are much better than those offered by FedEx Ground. FedEx Ground confuses its customers by routinely using the nondescript phrase, Not Eligible. As a result, customers dont have a clue why a refund was rejected for their late packages. Hows that for user-friendly customer service? Another curious response offered for late packages is, Refund is not offered for packages that are on time. The shipper wants to shout into the phone, It wasnt delivered on time so dont tell me it was! According to a FedEx Ground customer service representative that I recently spoke with, there are some ZIP Codes that are designated to have alternate delivery days. I was told that in these instances its independent contractors have the option to deliver a package on either day one or day two in designated ZIP Codes. Hows that for driver independence? Has FedEx Ground informed its customers about the leeway in delivery standards? Here is an explanation that should be added to its automated system responses... your package is not eligible for refund even though we did not uphold our end of the bargain because we want to minimize the number of refunds that we pay. Or how about, Your package is not eligible for refund because we are unable to reduce our package handler turnover at our hubs and cannot service your package within the standard number of days. Those responses would at least give the customer some useful information.
Its clear that FedEx Corporation needs to step in and redirect the focus back to customer satisfaction to protect the FedEx brand. Last time I checked, UPS honors its guarantee throughout its network. Regardless of the destination! FedEx Ground just might want to borrow that page from Big Browns playbook. Im pretty sure it can be found on Page 1, Paragraph A, under the heading, The Customer Comes First.